EV market slowdown cuts into LG Energy Solution's profits

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EV market slowdown cuts into LG Energy Solution's profits

An employee at LG Energy Solution headquarters in Yeongdeunpo District, western Seoul [NEWS1]

An employee at LG Energy Solution headquarters in Yeongdeunpo District, western Seoul [NEWS1]

LG Energy Solution's operating profit plummeted 75 percent in the first quarter amid the slowing of EV sales globally. 
 
The Korean battery maker recorded 157.3 billion won ($116 million) in operating profit between January to March, down 75.2 percent on year, according to an earnings guidance released Friday.
 
It still beat the market consensus of 113.8 billion won compiled by FnGuide.
 
The company almost slipped into the red as, excluding its tax credits from the U.S. government's Inflation Reduction Act (IRA), it posted an operating loss of 31.6 billion won. 
 
"Tax credits worth 188.9 billion won were reflected in the quarterly operating profit,” LG Energy said in a statement. 
 
The IRA gives up to $7,500 in tax credits to electric vehicle (EV) buyers whose vehicles were assembled in North America and made with minerals mined and processed in the U.S., or countries and regions that have free trade agreements with Washington.

 
Revenues fell 30 percent to 6.1 trillion won during the same period, in line with market expectations.  
 
An earnings breakdown or a net-profit estimate was not provided in the guidance.
 
LG Energy Solution is scheduled to release its finalized earnings figures for the March quarter later this month.

BY SARAH CHEA [[email protected]]
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